Stocks in Japan and South Korea rose on Wednesday but most Asian markets slipped as caution spread, pushing up the U.S. dollar and yen, before official results of U.S. bank stress tests are released on May 4.

U.S. Treasury Secretary Timothy Geithner said on Tuesday most U.S. banks have enough reserves to keep lending, but investors were reluctant to dive back into risk, such as by pushing commodity-related currencies higher, until further clarity could be reached on the banking industry.

Major European stocks were expected to open 0.5 percent to 1 percent higher, according to financial bookmakers, ahead of results from companies including Morgan Stanley and Apple Inc .

Financials in the S&P 500 rose 8 percent on Tuesday <.GSPF>, but Asian bank stocks were mixed with investors cautious about prospects for further write-downs and the capital needs at banks around the world -- especially after the International Monetary Fund said write-downs could reach $4.1 trillion.

You have to ask yourself how long will enthusiasm for Mr. Geithner's words last? said Jan Lambregts, head of Asia research for Rabobank Global Financial Markets in Hong Kong.

Essentially, until May 4, we're waiting for results from the stress tests. It's quite a messy process until then.

The MSCI index of Asia Pacific shares outside Japan <.MIAPJ0000PUS> was up 0.5 percent after a 1.5 percent fall on Tuesday. Rolling 20-day returns for the index have been falling in April, but at 8.6 percent are still higher than 3.7 percent on the all-country world index <.MIWD00000PUS>.

Japan's Nikkei share average <.N225> rose 0.2 percent, as gains in technology shares pipped declines in industrials.

Hong Kong's Hang Seng index <.HSI> slipped 0.1 percent in choppy trade. CITIC Pacific <0267.HK> was a standout winner on the day as its shares gained 5.4 percent after the conglomerate agreed to sell its stake in an Inner Mongolian power company for $293 million.

After U.S. share markets finished Tuesday up between 1.5 percent to 2 percent, S&P 500 futures were down 0.5 percent, indicating a lower open on Wall Street later in the day.


Institutional investor confidence has strengthened after a G20 meeting that bolstered the IMF, but still faces obstacles to sustaining gains.

The State Street Investor Confidence index rose to the highest since July 2008 in April, but the results of the U.S. Treasury stress tests on banks and the fate of unorthodox policy measures by the Bank of England are near-term headwinds.

There are still many chapters yet to unfold before this tragedy reaches its final page, State Street Global Markets analysts said in a note. However, the sub-plot of the financial crisis and collapsing global equity markets may be drawing to a resolution.

The dollar shed 0.3 percent to 98.30 yen after gaining 0.8 percent on Tuesday. It hit a six-month high of 101.45 on April 6 but has gradually fallen since then.

The euro fell 0.4 percent to 127.15 yen after jumping nearly 1 percent on Tuesday. It edged down 0.1 percent to $1.2940.

Uncertainty about the European Central Bank's next monetary policy move has kept selling pressure on the euro this month.

The ECB is expected to cut interest rates from 1.25 percent to 1.0 percent in May but it is unclear whether it will follow the Federal Reserve and other central banks and create money through other means, such as buying corporate or sovereign debt.

U.S. Treasuries recovered some with stock futures slipping. The yield on the benchmark 10-year Treasury note ticked down to 2.88 percent from 2.90 percent late in New York.

Industrial metals prices were mixed, but copper was helped by a report showing China imported a record amount of the material to build reserves. Copper traded in Shanghai for delivery in July rose 1.4 percent after hitting its daily limit decline of 5 percent on Tuesday.

U.S. crude prices were steady at $48.58 a barrel after trading higher earlier in the day on an unexpected fall in U.S. stockpiles. Oil hit a one-month low of $43.83 on Tuesday.